IIFCL permitted to tap debt market: FM

New Delhi, Dec 20 (UNI) Stating that India Infrastructure Finance Company Ltd (IIFCL) will remain a 100 per cent government-owned company, Finance Minister P Chidambarm today said it has been given permission to tap the debt market to raise funds, for which sovereign guarantee to the tune of Rs 10,000 crore would be provided in a year.

Mr Chidambaram also said the Finance Secretary has been asked to put up a note on how to use foreign exchange reserves for infrastructure projects and Prime Minister Manmohan Singh has stated that the requirements of this sector would require a phenomenal investment of 320 billion dollars in the next five years.

The Finance Minister made these remarks on the sidelines of a function on Infrastructure, organsied by the Confederation of Indian Industry.

The implication of Finance Minister's remark that IIFCL will remain a 100 per cent government company is that there are no plans by it to tap the equity market.

Depite the fact that IIFCL has about Rs 5,000 crore for 31 projects, disbursement has taken place only in a handful of projects.

Mr Chidambaram said 17 projects entailing Rs 3,970 crore of investments under Viability Gap Funding (VGF) mechansim have been granted approval in principle.

The Finance Minister said the government will promote industrial corridor along the proposed Delhi-Mumbai freight corridor and golden quadrilateral route.

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